Why NBFCs Should Embrace Digital Payments Solutions?

Government of India started the digitalisation change in 2015, under which it evisioned expanded web network. NBFCs also have been at the front of this change or development and have been seeking themselves with advanced stages to associate with prospective clients.

Rohit Katyal, Group Head - Business, Easebuzz said, "By integrating digital payment platforms, NBFCs can offer seamless online services like loan disbursements, EMI collections, refunds etc, to their customers. With the JAM (Jan Dhan-Aadhaar-Mobile) Trinity, new-age digital payment modes such as Unified Payments Interface (UPI), Bharat Bill Payment System, and Aadhaar-Enabled Payment System are ensuring seamless money transfer digitally and also making it easy for NBFCs to improve their EMI collection cycles. Various payment options make it easier for the NBFCs to improve their banking facilities and help them offer superior digital services to their customers. Fintechs today are also offering value added services like automated payment reminder tools, automated reconciliation, easy refunds processing etc making it a great proposition for NBFCs."

Benefits of NBFC digitalisation

In the year 2020, the Reserve Bank of India (RBI) gave a notice managing credits obtained by the banks and NBFCs over digital stages. The notice emphasises the standards of privity between the NBFC and the borrower inside the current administrative structure and the requirement for "best practices" in the digital lending world.

Katyal said, "Earlier NBFCs have limited payment modes like netbanking and debit card. Now with the advancement in technology and innovations from payment aggregators, the scope of digital payment solutions have widened enabling NBFCS to offer their customers a wide range of payment modes such as netbanking, debit card, UPI etc."

People today look for quick and hassle-free admittance to loan administrations all at a time, place and channel of their inclination. They anticipate a digital experience which is presented by different businesses like retail, travel and hotel. Accordingly, NBFCs need to embrace such smoothed out processes and paperless activities to convey according to client assumptions.

"Customers can now choose a feasible mode of payment and can pay EMIs digitally from the convenience of their homes, to the financial institutes (NBFCs) making the process of payment collections easy and seamless. Besides payment modes, availability and deeper internet penetration has also been helping NBFCs in embracing digital payment solutions. It has also given customers the liberty to make payments from anywhere or wherever they are", he added.

Need of Security for NBFC digitalisation

In order for NBFCs to use fintech should meet the necessities of the new-age clients, it should look beyond the normal or conventional methodology and put resources into digitalisation and technological capacities that will permit them to interface and take special care of the client in a customised manner. But with this, also some key parameters of safety should be prioritised.

"Security and Safety becomes paramount when it comes to digital payments. NBFCs are now conscious of this and are partnering with PCI DSS compliant payment solutions platforms like Easbeuzz for secure payments. These digital payment solutions will help NBFCs tokenise payment details. These solutions will safely relay the information between the acquirer and customers. They also identify any vulnerabilities or threats in the process and notify the NBFCs or customers as appropriate", Katyal said.

NBFCs should keep customer data confidential. Outsourcing arrangement must specifically provide safety to customer data. Also, there must be needed methods to deal with cyber threats.